The international finance facility-Reaching the MDGS without spending more?

This paper comprises a brief review of current debates around the potential benefits and drawbacks of the proposed International Finance Facility (IFF). The IFF's main strength is clear: it recognizes the urgent need for significantly larger and more predictable aid flows, and suggests a financial mechanism able to deliver such flows within existing political constraints. However, several aspects of the proposal have the potential to exacerbate current aid ineffectiveness and inequality in both the short and longer term. These factors include the IFF's governance structure; the 'extra layer' of conditionality added by the IFF; the potential sharp decline in aid flows after the IFF's initial phase; and the detraction of attention from other important global agendas. More work on developing innovative mechanisms to deliver social protection and basic services to poorly-governed or conflict-ridden areas is required, as are more courageous actions on the part of the UK and other rich countries. Otherwise, the IFF could mean mortgaging the future well-being of 900 million hard-to-reach poor people in order to achieve-or come closer to achieving-the MDGs today. © 2004 John Wiley and Sons, Ltd.